Standing Committee E

[Mr. Roger Gale in the Chair]

Communications Bill

Roger Gale: Good afternoon. I have to report that the Programming Sub-Committee has met and agreed a variation on the timetable, which has to be put to the Committee. The Minister will explain the terms of the motion.

Kim Howells: I beg to move,Draft resolution of the programming sub-committee

Draft resolution of the programming

That the Standing Committee recommends that the Order of the House of 3rd December 2002 (Communications Bill) Programme) be varied as follows— 
 Consideration and Third Reading 
 1 Paragraphs 4 and 5 of the Order (Consideration and Third Reading shall be omitted. 
 2 Proceedings on consideration and Third Reading shall be concluded in two days. 
 3 Proceedings on consideration shall be taken on each of the days as shown in the first column of the following Table and shall be taken in the order so shown, and each part of the proceedings shall (if not previously concluded) be brought to a conclusion at the time specified in the second column of the Table. 
 TABLE 
 Proceedings 
 Time for conclusion of proceedings 
 First day 
 New Clauses relating to Parts 3 and 4, 
 The moment of interruption. 
 New Schedules relating to Parts 3 and 4 and amendments relating to Clauses in Parts 3 and 4 and amendments relating to Schedules 9 to 15 
 Second day 
 Remaining New Clauses, remaining New Schedules, amendments relating to Clauses in Parts 1,2, 5 and 6, amendments relating to Schedules 1 to 8, amendments relating to Schedules 16 to 19 and remaining proceedings on consideration 
 One hour before the moment of interruption 
 4 Proceedings on Third Reading shall (so far as not previously concluded) be brought to a conclusion at the moment of interruption on the second of those days.
 I shall be brief. We have agreed to put aside two days to debate the Bill on Report. The first day will deal mainly with Department for Culture, Media and Sport business, and the second mainly with Department of Trade and Industry business. I hope that the Committee agrees the resolution.

John Greenway: I rise simply to record our thanks to the Minister.
 Question put and agreed to.

Schedule 17 - Minor and consequential amendments

Amendments made: No. 673, in 
schedule 17, page 480, line 22, leave out 'services' and insert 'networks'.
 No. 674, in 
schedule 17, page 480, line 25, leave out 'services' and insert 'networks'.—[Mr. Timms.]

Stephen Timms: I beg to move amendment No. 682, in
schedule 17, page 481, line 14, at end insert— 
 '74A In paragraph 18(2) of Schedule 2 to that Act (notices affixed to overhead apparatus), for ''paragraph 24(4)(a)'' there shall be substituted ''paragraph 24(2A)(a)''.'.

Roger Gale: With this it will be convenient to take the following:
 Government amendments Nos. 683 and 684.

Stephen Timms: The amendments are further drafting corrections and I commend them to the Committee.

Andrew Robathan: For the record, will the Minister tell the Committee the number of amendments to the Bill that have been agreed?

Stephen Timms: I am happy to pass on to the hon. Gentleman that the total by the end of the afternoon will be 134, which is on the right side of his wager target.

Roger Gale: It would be wholly inappropriate of the Chairman to tell the hon. Member for Blaby (Mr. Robathan) that, having won his wager, the drinks are on him.
 Amendment agreed to. 
 Amendments made: No. 613, in 
schedule 17, page 485, line 9, leave out 'section 322(3) of' and insert 
 'paragraph 18A of Schedule 12 to'.
 No. 614, in 
schedule 17, page 485, line 14, at end insert— 
 '(d) after paragraph (c) there shall be inserted— 
 ''(d) section 322(3) of the Communications Act 2003.''.'.
 No. 615, in 
schedule 17, page 486, line 8, leave out 'section 322(3) of' and insert 
 'paragraph 18A of Schedule 12 to'.
 No. 616, in 
schedule 17, page 486, line 13, at end insert— 
 '(d) after paragraph (c) there shall be inserted— 
 ''(d) section 322(3) of the Communications Act 2003.''.'. 
 —
 No. 310, in 
schedule 17, page 498, line 18, at end insert— 
 '( ) in subsection (2)(b), for ''the issue or renewal of the licence'' there shall be substituted ''the issue of the licence or the making of the grant'';'.
 No. 311, in 
schedule 17, page 498, line 20, leave out 'and'.
 No. 312, in 
schedule 17, page 498, line 22, at end insert 
 'and 
 ( ) in subsection (5), at the end there shall be inserted ''or any grant of recognised spectrum access made in accordance with regulations under section 3A''.'.—[Mr. Timms.]

Stephen Timms: I beg to move amendment No. 667, in
schedule 17, page 504, line 15, at end insert— 
 '() After paragraph 14(3) (executive committees of OFCOM to include member or employee of OFCOM) there shall be inserted— 
 ''(3A) Subparagraph (3) has effect in the case of a committee of OFCOM which— 
 (a) is not the Content Board, but 
 (b) has functions that are confined to functions falling within section 12(2) of the Communications Act 2003 (functions within the Content Board's remit), 
 as if the reference in that subparagraph to a member of OFCOM included a reference to a member of the Content Board who is not a member of OFCOM.'' '.
 As my hon. Friend the Minister for Tourism, Film and Broadcasting explained to the Committee on 12 December 2002, Lord Currie, the chairman of Ofcom, seeks flexibility for the internal structure within which Ofcom exercises its functions. The purpose of the amendment is to deliver that flexibility. We examined other models for regulators, in particular, we noted the benefits that the Financial Services Authority found in organising itself in different ways to reflect changes in business models in its sector. 
 One of the principal content functions of Ofcom will be consideration of complaints of unfairness and unwarranted infringement of privacy, which are currently the responsibility of the Broadcasting Standards Commission, can be a time-consuming task. To guard against that absorbing too great a proportion of the content board's time, Lord Currie and Richard Hooper, who is to chair the content board, have asked that it should be possible to establish a committee of Ofcom to make determinations on such complaints. On that committee will be a member of the content board who is not necessarily a member of the Ofcom board. Officials of Ofcom need not undertake the making of determinations on the complaints. 
 The amendment will therefore give Ofcom a little more flexibility in deciding how to organise those matters. The amendment provides that content matters can be determined by a committee of Ofcom that contains at least one member of the content board, all of whom are appointed by Ofcom in any case. I hope that the Committee feels that the amendment is helpful. 
 Amendment agreed to. 
 Question proposed, That this schedule, as amended, be the Seventeenth schedule to the Bill.

Andrew Lansley: I will not trespass out of good order by rehearsing a previous debate, but I want it to be noted that the question of whether Ofcom should have the ability to charge for grants of recognised spectrum access in excess of the costs arises under paragraph 145. It was the subject of my amendment No. 305, which we
 debated in an earlier group of amendments.
 I want to reiterate my view, which derives also from the consideration of the Bill by the Select Committee on Trade and Industry. If recognised spectrum access is to be proceeded with, we have seen nothing to persuade us that it is desirable that there be an ability to charge beyond costs for RSA. We should at least establish whether RSA has benefits in the eyes of industry—whether they want to acquire it—before we start charging them in excess of what Ofcom would have to pay to provide it.

Stephen Timms: As the hon. Gentleman says, this discussion refers back to an earlier debate. We have taken the view that charges for RSA should be on a par with charges made to other spectrum users. That is the basis on which the arrangements have been developed, and I believe that time will demonstrate that we have adopted the right approach.
 Question put and agreed to. 
 Schedule 17, as amended, agreed to.

Schedule 18 - Transitional provisions

Andrew Robathan: I beg to move amendment No. 652, in
schedule 18, page 506, line 22, after 'agreement', insert 
 'or licence granted under any enactment, deed or other legally enforceable arrangement (''the agreement'')'.

Roger Gale: With this it will be convenient to discuss the following:
 Amendment No. 653, in 
schedule 18, page 506, line 24, leave out 'provides'.
 Amendment No. 654, in 
schedule 18, page 506, line 25, after '(a)', insert 'provides'.
 Amendment No. 655, in 
schedule 18, page 506, line 26, after '(b)', insert 'provides'.
 Amendment No. 656, in 
schedule 18, page 506, line 28, at end insert 
 'or refers to any relevant licence.'.
 Amendment No. 657, in 
schedule 18, page 506, line 41, at end insert— 
 '(3A) Reference to any relevant licence in any agreement shall be construed as including references to any notification made pursuant to section 29 of this Act, any approval of OFCOM or activity which is otherwise authorised or permitted under this Act and accordingly the repeal of section 7 of the Telecommunications Act 1984 shall not, of itself, have any effect on any such agreements, deeds or arrangements.'.

Andrew Robathan: We are entering the home straight, but a lot remains to be covered and much of it is important, so I will not discuss these amendments at length.
 The amendments are designed to ensure that existing third-party contractual arrangements are unaffected by the withdrawal of the licensing regime. We believe that to be the Government's intention, but we think that they should slightly broaden the provision that to ensure that any relevant licences are included. 
 Paragraph 3 to schedule 18 sets out agreements that cease to have effect or are capable of being terminated if a party to the agreement ceases to hold the relevant licence. It provides that such agreements are not to cease to have effect or be capable of being terminated as a result of the abolition of licences by the Bill. Paragraph 6.3.2 of the draft Communications Bill policy document of May 2002 states that the types of agreement that might be affected by the abolition of the licensing regime should be made available: they include wayleave and interconnection agreements. That reflects the Government's intention that 
''the parties to these agreements etc. should be left in the same position despite the abolition of the licences and obligations.''
 United Kingdom mobile operators support the Government's intention, but believe that they do not go far enough. These amendments would strengthen this aspect of the Bill by extending the provisions to all agreements, rather than just relevant licences, such as those issued under the Wireless Telegraphy Acts. The mobile operators have entered into a wide variety of agreements across their businesses, which relate to—among other things—network infrastructure, including masts and base stations. In relation to interconnection with other telecommunication networks, they have entered into agreements with suppliers and customers that make reference to or are otherwise somehow dependent on their holding a licence under the Telecommunications Act 1984. 
 It is not merely a matter of some agreements being terminatable—perhaps terminable is the correct word—if a licence ceases to exist. Warranties are often given in respect of an operator having such a licence that might be breached by the withdrawal of the licensing regime. A wide range of agreements is affected by the withdrawal of the licence regime, but the risks of inadvertently interfering with existing contractual arrangements can be dealt with if the transitional agreements in the paragraph are amended to include arrangements that are sufficiently widely drafted. While the amendments might not be perfect, we hope that the Government will at least provide adequate assurance to operators that the transitional provisions will include all agreements and all licences.

Stephen Timms: I understand the concern that has given rise to the amendments. As the hon. Member for Blaby said, there are agreements in place that are dependent on a licence being held. When those agreements were put in place, it was never envisaged that the licensing arrangements would be abolished, so we must take care in making such a fundamental change that we do not inadvertently cause difficulties. I sympathise with that concern—indeed, so that effective transitional provisions were drafted, we made a point of asking for information about such agreements when we published the draft Bill in May. However, the amendments do not provide an effective approach to the issue.
 Proposed new sub-paragraph (3A) might have some limited effect, but we cannot support it because it leaves matters too uncertain. It proposes to construe any reference in any agreement to a relevant licence—including various items under the regulatory regime established under the Bill, such as a notification made 
 under clause 29—in such a way that the abolition of telecoms licences would have no effect on those matters. Given that the intention is that current telecoms licences will be abolished and replaced by the regulatory regime in part 2, we think it unlikely that the abolition of the licences could have any effect on such matters. 
 The only conceivable situation in which a problem might arise is in the context of conditions contained in telecommunications licences that are saved in accordance with other provisions in the schedule. However, each of those provisions already deals with and is linked to the new regulatory regime, so we can see no reason why the amendment would be necessary in that context. 
 I think that I can give the hon. Gentleman the assurance that he was seeking. We are sympathetic to the concerns about agreements that are conditional on licensing. In paragraph 3, we have made the provision that we think appropriate and necessary: it deals with everything of which we are aware that might present difficulties in this context. We would be prepared to consider further provisions if those who are concerned—the hon. Gentleman referred to mobile operators and there may be others—provided information about specific problems that could be dealt with by such means, but such information must be provided quickly if we are to have an opportunity to make use of it during the remaining stages of the Bill. I hope that that offer is helpful. 
 As far as my officials and I are aware, the Bill as drafted deals with all the problems that might arise. If there are concerns, we would like to know the details.

Andrew Robathan: I trust that the mobile operators have heard what the Minister said—I shall make sure that they do—because they are the ones who raised that issue. I had hoped that this would be number 136, but I beg to ask leave to withdraw the amendment.
 Amendment, by leave, withdrawn.

Stephen Timms: I beg to move amendment No. 273, in
schedule 18, page 508, line 15, leave out '17' and insert '16'.
 This is another amendment correcting a very minor error in the text of the Bill. The reference is to article 17 of the universal service directive; it should be to article 16. 
 Amendment agreed to.

John Greenway: I beg to move amendment No. 687, in
schedule 18, page 508, line 30, at end insert 
 'but a condition referred to in subparagraph (2)(a) shall remain in force only in relation to the market identified under subparagraph (4)(b), and a condition referred to in subparagraph (2)(b) shall remain in force only in relation to the market identified under subparagraph (4)(a)'.

Roger Gale: With this it will be convenient to discuss the following:
 Amendment No. 688, in 
schedule 18, page 508, line 39, at end insert 
 'or they have determined not to apply any SMP conditions to that person by reference to that market'.
 Amendment No. 689, in 
schedule 18, page 509, line 4, at end insert— 
 '(10) Immediately after the giving of a continuation notice by virtue of subparagraph (2)(b), OFCOM shall commence, and as expeditiously as reasonably practicable conclude, an analysis of the market referred to in subparagraph (4)(b), and shall determine whether or not to set SMP conditions under section 89 in relation to that market.'.
 Amendment No. 690, in 
schedule 18, page 514, line 4, leave out from 'they' to end of line 6 and insert 
 'or the Director have, prior to the giving of the notice, identified the relevant market to which the direction relates for the purpose of making a market power determination.'.
 Amendment No. 691, in 
schedule 18, page 514, line 9, at end insert— 
 '(6) A direction referred to in subparagraph (4) shall cease to have effect on the date on which any SMP conditions which relate to the relevant market to which the direction relates and which the Director or OFCOM have determined to apply come into effect, or on the date on which the Director or OFCOM determine not to apply any such conditions in relation to that market.'.

John Greenway: Throughout our sittings, we have had to address some extremely technical issues that are as dry as dust. I am afraid that these amendments fall into the same category, but they are extremely important none the less. I am sure that the Minister has been well briefed and we look forward to his answer.
 Amendment No. 687 would ensure that when Ofcom gives continuation notices to roll forward existing regulation, the continuing regulation is applied only to the market or markets identified by Ofcom in the notices, and to no greater extent than that justifies. Paragraph 6(2) and (4) enables Ofcom simply to roll forward existing regulation of apparatus supply without any requirement for judgment or analysis of the extent to which existing regulation is relevant or properly targeted. Ofcom may do that by forming a view that existing conditions have the purpose of regulating an apparatus market or markets identified in the continuation notice without carrying out a significant market power analysis. However, the existing conditions may cover a wider market or markets than those that Ofcom identifies as intended to be regulated. The sub-paragraphs allow conditions to continue to be applied to the wider market or markets not identified by Ofcom. They do not confine the continuing effect of the conditions to the market or markets that Ofcom has identified. 
 Ofcom has a duty to comply with good regulatory principles, and especially to ensure that regulation is justified and well targeted. The amendment would assist Ofcom in that process and prevent the possibility that it could side-step its duties to comply with those principles and good practice, whether by design or default. 
 Amendment No. 688 would ensure that Ofcom is required to give notice with the effect of ceasing the application of existing licence conditions if it has analysed a specific market and decided not to apply 
 significant market power conditions. Under paragraph 6(6), existing licence conditions cease to have effect if Ofcom gives notice to the licensee. Under paragraph 6(7), it must give such a notice if it has analysed the relevant market and determined whether to apply SMP conditions, and if those conditions have come into force. However, nothing in the Bill says what would happen if Ofcom analysed a specific market and decided not to apply SMP conditions because, for example, it concluded that the market was competitive. The notice that Ofcom is required to give under paragraph 6(6) that would cause existing licence conditions to cease to have effect would not cover that situation. 
 Under the regime introduced by the European Union directives that the Bill implements, significant market power should be regulated ex ante by SMP conditions, or not regulated at all. If Ofcom decides not to apply SMP conditions, there can be no justification for continuing any ex ante regulation of the market concerned. This important amendment would close that loophole by providing that Ofcom must give notice to discontinue the effect of an existing condition if it determines not to apply SMP conditions to a market. Without the amendment, some markets could continue to be regulated after Ofcom had decided that there was no requirement for SMP conditions to be applied. Not only would that go completely against the grain of each element of good regulation, but it would potentially be highly damaging to a competitive market. 
 Amendment No. 689, like amendment No. 690, is consequential on amendment No. 688 being agreed. It would oblige Ofcom to carry out a market review consistent with clause 89 within a reasonable time after giving a continuation notice in relation to apparatus, and to decide whether to make SMP apparatus conditions. Under paragraph 6, a continuation notice served by Ofcom relating to conditions that regulate apparatus can continue in force indefinitely, thus perpetuating regulation of apparatus supply under an existing licence. That is regardless of whether a person has SMP in an apparatus market and without an obligation on the part of Ofcom to undertake a market analysis to determine whether SMP exists in relation to an apparatus market. 
 Furthermore, it is fundamental to the changes required by the EU directive that licences are abolished and replaced by the general authorisation. Logically, it is absurd to maintain in place a licence to run telecommunications systems, which is what the existing licences are for, for the purposes of regulating the supply of apparatus. It is also discriminatory so to do, because only an apparatus supplier who is a licensee can be regulated in that way. 
 Regulation of apparatus should be based on the existence of significant market power in a relevant apparatus market. There is no justification for continuing the old-style licence regulation of apparatus supply for anything other than the shortest possible period while the market review is carried out. Ofcom must be obliged, as it is in the case of electronic communication services, to undertake the market analyses to determine whether any person has 
 SMP in an apparatus market in respect of which a continuation notice has effect. If Ofcom determines to apply SMP conditions in respect of an apparatus market or, if amendment No. 688 is agreed, Ofcom determines not to apply SMP conditions, it will be required to serve a notice under sub-paragraph (7) ceasing the continuation notice. Apparatus supply can then be properly regulated, but only on the basis of significant market power in a particular apparatus market. Regulation in any other way post-Royal Assent to the Bill is unnecessary and undesirable. 
 I turn now to amendment No. 690. Paragraph 17 of the schedule enables Ofcom to continue in force directions under the Telecommunications (Interconnection) Regulations 1997, when it considers it appropriate to do so. I am sure that the Committee will be familiar with those regulations. Under the new regulatory regime, economic regulation is intended to be carried out only on the basis of market analysis and SMP determinations—a point to which I have drawn attention when speaking to the other amendments. The amendment would link the continuing effect of such directions to the SMP process by limiting the power to maintain existing directions in force to markets that have been identified for the purpose of making market power determinations. 
 Under amendment No. 691, the directions will cease to have effect, either when SMP conditions made by Ofcom come into force or when Ofcom decides not to make SMP conditions. The amendment would provide a mechanism for bringing directions from the previous regulatory regime, continued in force under paragraph 17(4), to an end when the director of Ofcom has carried out market analyses of the relevant markets and has determined whether or not to apply SMP conditions. 
 Under the Telecommunications (Interconnection) Regulations 1997, which I have already mentioned, the Director General of Telecommunications has power to issue directions to resolve interconnection disputes. He has exercised that power on several occasions, including, for example in relation to flat-rate internet access and partial private circuits. 
 Paragraph 17(4) enables Ofcom to continue the old regime directions that are in force if it decides that it is appropriate to do so. Surely, in principle, the old regime regulations should be brought to an end, but in relation to the directions, there is no mechanism in the Bill for achieving that. Such directions relate to matters which, if they are to be regulated, should be regulated by SMP conditions made as a result of SMP determinations following market analysis, and not on the basis of the regulatory regime that went before. 
 The amendments would ensure that, once the Bill has received Royal Assent and the new provisions have come into force, there would be no overhang from the continuing regulation of the markets for Ofcom, as that would be entirely inappropriate, and more to the point, unnecessary in relation to the United Kingdom Government complying with the EU directives, which is what the schedule and other clauses seek to achieve.

Stephen Timms: Few days have been allowed to pass in Committee without some discussion of the regulation of apparatus markets. Hon. Members are, I am sure, heartened to know that today is no exception. I am only disappointed that the hon. Member for Ryedale (Mr. Greenway) did not remind us of the hard-wired telephone that he has at home.
 We have said on several occasions that the need for apparatus regulation is diminishing, but we do not think that it has yet disappeared, particularly as regards hard-wired telephones. I have already said that I accept that the existing provisions run somewhat too wide and, as the Committee knows, I propose to table amendments on Report specifically to reduce the scope of the definition of apparatus for those purposes. 
 I would like to consider further and reflect on amendment No. 687, which is equally helpful. It would limit the scope of continuation notices that may be made by Ofcom. The existing licence condition, which is continued in effect by the notice, would then have effect only in a market identified for the purpose of the continuation notice. The hon. Gentleman is on to something there. I shall consider the matter further and will, if appropriate, table an amendment on Report. 
 Amendment No. 689 would introduce something entirely new and, again, I think that it is rather helpful. The amendment would require Ofcom, after continuing any existing licence condition relating to apparatus, to conduct a review of the relevant market to establish whether there is a person with significant market power in the market. It is, of course, a requirement of the directive that such a review should take place as early as is practicable in relation to services markets. I am confident that Ofcom would in any case carry out a similar review in relation to any apparatus markets, even without an explicit obligation to do so, but it seems entirely reasonable, given the provision for service markets, to state that explicitly in the Bill. I undertake to consider that proposal and table an appropriate amendment on Report. 
 I have more difficulty with amendments Nos. 690 and 691. They relate to another kind of transitional provision that allows for the continuation of directions made under the interconnection regulations. Those would be existing directions made within the current framework that could, for example, specify issues that must be covered in an interconnection agreement. The amendments would relate those directions to a specific market, either before the directions were continued, or so that they could terminate when the market had been reviewed and appropriate SMP conditions had been imposed. However, directions made under regulation 6 are not related to markets because they relate to interconnection between public operators who do not necessarily have market power at all—by definition, most do not. I suggest therefore that the concept of trying to relate the obligation to a relevant market does not work in this case. Amendment No. 691 is consequential on amendment No. 690 and I shall resist it on the same grounds. 
 The effect of amendment No. 688 is fully contained in paragraph 6(7) and, especially, in sub-paragraph (7)(b). 
 I am grateful to the hon. Member for Ryedale and I shall look again at amendments Nos. 687 and 689, which would give a sharper focus to the provisions. I shall table appropriate amendments on Report and I hope that he will withdraw the amendment. 
 Finally, let me sum up my concern about amendments Nos. 690 and 691. The hon. Gentleman's case was right in respect of SMP conditions, but access-related conditions are not necessarily dependent on market analyses.

John Greenway: When I get home this evening my wife will ask me what sort of a day I had. I will tell her that the Minister more or less accepted two of my amendments, but when she asks me what they were about, I shall say that I have not got the faintest idea—[Laughter.] Fortunately, the Hansard reporters will have recorded every word and we will be able to read the report and learn from that.
 I am genuinely grateful to the Minister. We can joke about the complexity of the subject—in fact, when I was reading through my speaking notes, I said to my hon. Friend the Member for Maldon and East Chelmsford (Mr. Whittingdale), ''Well, we're back to the linguini again''—because the issues are complicated. However, they are of considerable concern to the relevant businesses and customers of the businesses—that includes all of us. 
 I am grateful to the Minister for reminding me that I must do something about the telephone that I rent. Owing to the way in which he responded, the promise that he will reflect on the amendments, and the hope that he will table welcome amendments on Report, I beg to ask leave to withdraw the amendment. 
 Amendment, by leave, withdrawn.

Stephen Timms: I beg to move amendment No. 669, in
schedule 18, page 510, line 1, leave out 'requiring compliance by a' and insert 
 'of a licence under section 7 of the 1984 Act requiring compliance by the'.

Roger Gale: With this it will be convenient to discuss the following:
 Government amendments Nos. 670 and 671.

Stephen Timms: We need to make provisions so that Ofcom can continue to resolve under rules currently applying to the telecommunications interconnection regime dispute cases that arise but are not determined before the introduction of the new disputes regime that is set out in chapter 3 of part 2. The amendments will allow that.
 I shall be happy to give the Committee further details, but I might have said sufficient for hon. Members to think that the amendments are desirable. 
 Amendment agreed to. 
 Amendments made: No. 670, in 
schedule 18, page 513, line 37, after 'Act', insert 
 '(except sections 184 and 185)'.
 No. 671, in 
schedule 18, page 513, line 39, at end insert— 
 '( ) Where OFCOM make a determination for resolving a dispute falling to be resolved in accordance with subparagraph (1)— 
 (a) their powers on making that determination are to be those which would have been exercisable by the Director under those regulations (instead of those under Chapter 3 of Part 2); 
 (b) conditions of a licence under section 7 of the 1984 Act requiring compliance with directions given by the Director under regulation 6 of those regulations are to continue to have effect as if they also applied to directions given by OFCOM by virtue of paragraph (a); and 
 (c) paragraph 9 of this Schedule has effect as if the reference in subparagraph (1)(d) to directions given by the Director under that regulation included a reference to directions given by OFCOM by virtue of paragraph (a) of this subparagraph.'.
 No. 445, in 
schedule 18, page 521, line 7, at end insert— 
 'Applications for extension of pretransfer licences{**qc**} 
 41A (1) Section 247(2B)(a) does not prevent the determination by OFCOM of a day falling less than one year after the making of the determination where— 
 (a) OFCOM consider that the day by which they would need to publish a notice is a day which is not more than 15 months after the commencement date; and 
 (b) the determination of that day is made as soon as practicable after the commencement date. 
 (2) Where the day determined by OFCOM for the purposes of paragraph (b) of section 247(2A) is a day in the period of three months beginning with the day after the determination, that paragraph shall have effect as if for the words ''three months before'' there were substituted ''on''. 
 (3) In this paragraph, the ''commencement date'' is the date on which section 247 comes into force. 
 Applications for renewal of licences under 1990 Act and 1996 Act{**qc**} 
 41B (1) A provision set out in subparagraph (2) does not prevent the determination by OFCOM of a date falling less than one year after the making of the determination where— 
 (a) OFCOM consider that the relevant date for the purposes of the section in question is a date which is not more than 15 months after the commencement date; and 
 (b) the determination of the relevant date is made as soon as practicable after the commencement date. 
 (2) Those provisions are— 
 (a) section 53(12) of the 1990 Act; 
 (b) section 103A(12) of the 1990 Act; 
 (c) section 104A(14) of the 1990 Act; 
 (d) section 16(12A) of the 1996 Act; 
 (e) section 58(12A) of the 1996 Act. 
 (3) An application which is made before the commencement date in accordance with a provision set out in subparagraph (5) shall be treated after that date as if it had been made in accordance with that provision as amended by this Act. 
 (4) Where, in a case where a provision set out in subparagraph (5) applies, the relevant date for the purposes of the section in question is a date in the period of three months beginning with— 
 (a) the commencement date, or 
 (b) the day after the day on which the relevant date is determined, 
 that provision shall have effect as if the words ''the day falling three months before'' were omitted. 
 (5) Those provisions are— 
 (a) section 53(2) of the 1990 Act; 
 (b) section 103A(2) of the 1990 Act; 
 (c) section 104A(3) of the 1990 Act; 
 (d) section 16(3) of the 1996 Act; 
 (e) section 58(3) of the 1996 Act. 
 (6) In this paragraph, the ''commencement date'', in relation to any provision set out in subparagraph (2) or (5) is the date on which the provision of Schedule 15 inserting or amending that provision comes into force.'.—[Mr. Timms.]
 Schedule 18, as amended, agreed to.

Schedule 19 - Repeals

Stephen Timms: I beg to move amendment No. 381, in
schedule 19, page 527, leave out lines 37 to 39.
 The amendment corrects a minor error in the schedule that provides for the repeal of an entry in part 3 of schedule 1 of the House of Commons Disqualification Act 1975, which relates to 
''a Director of the successor company within the meaning of Part 5 of the Telecommunications Act 1984.''
 That entry has already been repealed by another instrument, so we do not need to make provision for its repeal in the Bill. 
 Amendment agreed to. 
 Amendments made: No. 683, in 
schedule 19, page 529, line 29, column 2, at end insert— 
 '( ) in paragraph 9(2), the words ''section 11(1) of this Act,'';'.
 No. 684, in 
schedule 19, page 529, line 32, column 2, at end insert— 
 '( ) in paragraph 27(1), the words ''section 109(2) or (3) of or''.'.
 No. 617, in 
schedule 19, page 530, line 20, column 2, at beginning insert— 
 'In section 69(2), the word ''or'' at the end of paragraph (b). 
 In Schedule 2, the word ''or'' at the end of paragraph 17(2)(b).'.
 No. 446, in 
schedule 19, page 531, line 19, column 2, at end insert— 
 'In section 53(4), the words ''before the relevant date''.'.
 No. 447, in 
schedule 19, page 532, line 6, column 2, after 'subsection (3),', insert 
 'the words ''before the relevant date'','.
 No. 448, in 
schedule 19, page 532, line 7, column 2, at end insert— 
 '(aa) in subsection (8), the words from ''(whether because'' to ''any other reason)'';'.
 No. 449, in 
schedule 19, page 535, line 18, column 2, at end insert— 
 'In section 16(6), the words ''before the relevant date''.'.
 No. 450, in 
schedule 19, page 535, line 39, column 2, leave out 'Section 58(5).' and insert— 
 'In section 58— 
 (a) subsection (5); 
 (b) in subsection (6), the words ''before the relevant date''.'.—[Mr. Timms.]
 Schedule 19, as amended, agreed to. 
 Clause 392 ordered to stand part of the Bill.

Clause 393 - Transitional provision for anticipatory carrying out of functions

John Greenway: I beg to move amendment No. 692, in
clause 393, page 336, line 23, at end insert 
 'and where in pursuance of such an order under section 395 any such function as is referred to in subparagraph (a) is carried out by the Director-General of Telecommunications or the Secretary of State, references in section 187 to OFCOM shall in relation to anything referred to in that section have effect as if they were references to the Director General of Telecommunications or the Secretary of State as the case may be.'.
 It gives me great pleasure to move the final amendment to be debated in Committee. I hope that the run of success that we have had today will continue in respect of this amendment, because it relates to an important issue.

Andrew Robathan: Does my hon. Friend understand this one?

John Greenway: I do. I understood the other one, but whether I can remember what I said by tonight is another matter.
 The clause provides for certain Ofcom functions to be carried out by the Director General of Telecommunications or the Secretary of State during a transitional period following the completion of the passage of the Bill. By virtue of clause 187, decisions that would be made by Ofcom under part 2 and certain other decisions can be appealed against to the Competition Appeals Tribunal. It is therefore right in principle that decisions that are made during that transitional period, which could be appealed against if they were made by Ofcom, should be appealable if they were made by the director general or the Secretary of State. Indeed, the framework directive requires that decisions made by the national regulatory authority after 25 July this year—the implementation date for the directive—should be appealable. 
 The amendment seeks to close the loophole by providing that references to Ofcom in clause 187 should be considered—in relation to decisions made during the transitional period—as references to the director general or Secretary of State. I therefore ask the Minister to close the loophole in the interests of fairness and consistency. He must ensure that the requirements of the framework directive with regard to appeals are properly implemented and that the requirements are not imperilled by the Bill's receiving Royal Assent by 25 July.

Stephen Timms: The hon. Gentleman is on a roll this afternoon. [Hon. Members: ''Oh!''] The Committee will be aware that we do not expect Ofcom to be in a position to take on all its functions as early as 25 July 2003, which is the date by which the EC directive should be given effect. The clause allows those functions of Ofcom to be carried out by Oftel or the Radiocommunications Agency until Ofcom is ready to assume them.
 In drafting the clause we attempted to avoid specifying which provisions, other than those defined in subsections (7) and (8), were to be brought into force. We think that the general wording of subsections (1) to (3) delivers what the amendment seeks to achieve, but I understand the hon. Gentleman's concern that it is not as clear as it might be. The intention is that decisions of Oftel and of the Radiocommunications Agency should be subject to appeal under clause 187 during the transitional period, as Ofcom's decisions will be subsequently. If the hon. Gentleman will withdraw the amendment, I will certainly consider whether we need something along those lines. I am happy that we are able to conclude our consideration of the amendments in Committee on such a harmonious note.

John Greenway: I might add as a final comment that I remember similar blandishments being offered to the Opposition in respect of amendments that might be made during the closing stages of consideration of the Freedom of Information Bill, with which I was fortunate enough to deal for the Conservatives. Sadly, as we know, much of the Freedom of Information Act 2000 has not yet been brought into force, but I hope that, despite what the Minister says, the delay in implementing the requirements of the directive will not be too long, and that this is only a transitional period.
 The Minister says that he will consider the amendment, and I am sure that he will. He will agree that it is vital that the rights of appeal, which are very important to the organisations concerned, are properly enshrined in the Bill. In light of what he has said, I shall gladly beg to ask leave to withdraw the amendment. 
 Amendment, by leave, withdrawn. 
 Clause 393 ordered to stand part of the Bill. 
 Clauses 394 and 395 ordered to stand part of the Bill.

New clause 28 - Meaning of 'initial expiry date'

'(1) Subject to any postponement under this section, the date which is the initial expiry date for the purposes of this Part is 31st December 2014. 
 (2) The Secretary of State may (on one or more occasions) by order postpone the initial expiry date. 
 (3) The Secretary of State's power to postpone the initial expiry date— 
 (a) is to be exercisable before 30th June 2013 only if he has fixed a date after 30th June 2013 as the date for digital switchover; and 
 (b) is not to be exercisable on or after 30th June 2013 if he has fixed 30th June 2013 or an earlier date as the date for digital switchover. 
 (4) Where the Secretary of State makes an order under this section at a time after he has fixed a date for digital switchover, the date to which the initial expiry date is postponed must be a date not less than eighteen months after the date for digital switchover. 
 (5) The Secretary of State must exercise his power to postpone the initial expiry date if it at any time appears to him that that date would otherwise fall within the period of eighteen months immediately following the date fixed for digital switchover. 
 (6) Where an order under this section extends a licensing period for which a licence has been granted in accordance with section 209 or 214, the 1990 Act and this Part shall have effect (subject to subsection (7)) as if the licence had originally been granted for the extended period. 
 (7) Where an order under this section extends the period for which a licence is to continue in force— 
 (a) that order shall not affect the earliest time at which an application for the renewal of that licence may be made in accordance with section 211(2)(a) or 217(2)(a); 
 (b) as soon as reasonably practicable after making the order, OFCOM must make such modification of any determination made by them in the case of that licence for the purposes of section 211(2)(b) or 217(2)(b) as they consider appropriate in consequence of the extension; and 
 (c) neither section 211(3)(a) nor section 217(3)(a) applies to the making of that modification. 
 (8) In this section a reference to the date for digital switchover is a reference to the date fixed by the Secretary of State for the purposes of this section as the date which appears to him, in consequence of directions given by him for the purposes of the conditions of the licences for the relevant public broadcasting services, to be the date after which none of those services will be broadcast to any significant extent in analogue form. 
 (9) In this section ''the relevant public broadcasting service'' means any of the following— 
 (a) the services comprised in Channel 3; and 
 (b) Channel 5.'.—[Dr. Howells.]
 Brought up, read the First and Second time, and added to the Bill.

New clause 38 - Code relating to programme commissioning

'(1) The regulatory regime for every licensed public service channel includes the conditions that OFCOM consider appropriate for securing that the provider of the channel draws up and from time to time revises a code of practice setting out the principles he will apply when agreeing terms for the commissioning of independent productions. 
 (2) That regime also includes the conditions that OFCOM consider appropriate for securing that the provider of every licensed public service channel— 
 (a) at all times complies with a code of practice which has been drawn up by him by virtue of this section and is for the time being in force; and 
 (b) exercises his power to revise his code to take account of revisions from time to time of the guidance issued by OFCOM for the purposes of this section. 
 (3) The conditions imposed under this section must ensure that the code for the time being in force in the case of every licensed public service channel secures, in the manner described in guidance issued by OFCOM— 
 (a) that a reasonable timetable is applied to negotiations for the commissioning of an independent production and for the conclusion of a binding agreement; 
 (b) that there is what appears to OFCOM to be sufficient clarity, when an independent production is commissioned, about the different categories of rights to broadcast or otherwise to make use of or exploit the commissioned production that are being disposed of; 
 (c) that there is what appears to OFCOM to be sufficient transparency about the amounts to be paid in respect of each category of rights; 
 (d) that what appear to OFCOM to be satisfactory arrangements are made about the duration and exclusivity of those rights; 
 (e) that procedures exist for reviewing the arrangements adopted in accordance with the code and for demonstrating compliance with it; 
 (f) that those procedures include requirements for the monitoring of the application of the code and for the making of reports to OFCOM; 
 (g) that provision is made for resolving disputes arising in respect of the provisions of the code (by independent arbitration or otherwise) in a manner that appears to OFCOM to be appropriate. 
 (4) The conditions imposed under this section must also ensure that the drawing up or revision of a code by virtue of this section is in accordance with guidance issued by OFCOM as to— 
 (a) the times when the code is to be drawn up or reviewed with a view to revision; 
 (b) the consultation to be undertaken before a code is drawn up or revised; and 
 (c) the publication of every code or revised code. 
 (5) The provision that may be included in a condition imposed under this section includes— 
 (a) provision requiring a draft of a code or of any revision of a code to be submitted to OFCOM for approval; 
 (b) provision for the code or revision to have effect only if approved by OFCOM; and 
 (c) provision for a code or revision that is approved by OFCOM subject to modifications to have effect with those modifications. 
 (6) OFCOM— 
 (a) must issue and may from time to time revise guidance for the purposes of this section; 
 (b) must ensure that there is always guidance for those purposes in force; 
 (c) must, before issuing their guidance or revised guidance, consult the providers of licensed public service channels, persons who make independent productions (or persons appearing to OFCOM to represent them), the BBC and the Welsh Authority; and 
 (d) must publish their guidance or revised guidance in such manner as they think appropriate. 
 (7) Guidance issued by OFCOM for the purposes of this section must be general guidance and is not to specify particular terms to be included in agreements to which the guidance relates. 
 (8) Conditions imposed under this section requiring a code to be drawn up or approved may include transitional provision for treating a code drawn up before the imposition of the condition— 
 (a) as satisfying the requirements of that condition; and 
 (b) as a code approved by OFCOM for the purposes of conditions so imposed. 
 (9) In this section ''independent production'' has the same meaning as in section 269.'.—[Dr. Howells.]
 Brought up, read the First and Second time, and added to the Bill.

New clause 39 - Changes of control of Channel 5

'(1) The regulatory regime for Channel 5 includes, in every case where it is provided by a body corporate— 
 (a) a condition requiring the licence holder to give OFCOM advance notification of any proposals known to the body that may give rise to a relevant change of control; and 
 (b) a condition requiring the licence holder to provide OFCOM, in such manner and at such times as they may reasonably require, with such information as they consider necessary for the purposes of exercising their functions under this section and section [Action following review under s.[Changes of control of Channel 5]]. 
 (2) OFCOM must carry out a review where— 
 (a) they receive notification, in accordance with a condition of the licence to provide Channel 5, of proposals that may give rise to a relevant change of control; or 
 (b) a relevant change of control takes place (whether or not that change has been previously notified to OFCOM). 
 (3) The review shall be a review of the effects or likely effects, in relation to the matters mentioned in subsections (4) and (5), of— 
 (a) the change to which the proposals may give rise; or 
 (b) the change that has taken place. 
 (4) The matters mentioned in this subsection are— 
 (a) the extent to which time available for broadcasting programmes included in Channel 5 is allocated to programmes of each of the following descriptions— 
 (i) original productions; 
 (ii) news programmes; and 
 (iii) current affairs programmes; 
 (b) the extent to which programmes of each of those descriptions that are included in that Channel are broadcast at peak viewing times. 
 (5) The matters mentioned in this subsection are— 
 (a) the extent to which programmes made in the United Kingdom that are included in the service are programmes made outside the M25 area; 
 (b) the range of programmes made in the United Kingdom outside that area that are included in Channel 5; 
 (c) the extent to which the expenditure of the provider of Channel 5 on programmes made in the United Kingdom is referable to programme production at different production centres outside the M25 area; 
 (d) the range of different such production centres to which that expenditure is referable. 
 (6) Where OFCOM carry out a review under subsection (2), they must publish a report of that review— 
 (a) setting out their conclusions; and 
 (b) specifying any steps which they propose to take under section [Action following review under s.[Changes of control of Channel 5]]. 
 (7) In this section— 
 ''expenditure'', in relation to a programme, means— 
 (a) expenditure which constitutes an investment in or is otherwise attributable to the making of the programme; or 
 (b) expenditure on the commissioning or other acquisition of the programme or on the acquisition of a right to include it in a service or to have it broadcast; 
 ''original production'' has the same meaning as in section 270; 
 ''peak viewing time''— 
 (a) in relation to original productions, means a time determined by OFCOM for the purposes of section 270 to be a peak viewing time for Channel 5; and 
 (b) in relation to news programmes or current affairs programmes, means a time so determined for the purposes of section 271; 
 ''relevant change of control'' means a change in the persons having control over— 
 (a) a body holding a licence to provide Channel 5; or 
 (b) any body which— 
 (i) is connected with a body holding such a licence; and 
 (ii) appears to OFCOM to be involved, to any extent, in the provision of programmes for inclusion in that channel, or to be likely to be so involved. 
 (8) Expressions used in this section and in Part 1 of Schedule 2 to the 1990 Act (restrictions on licence holders) have the same meanings in this section as in that Part.'.—[Dr. Howells.]
 Brought up, read the First and Second time, and added to the Bill.

New clause 40 - Action following review under s.

'(1) If, on a review under subsection (2) of section [Changes of control of Channel 5], it appears to OFCOM that the relevant change of control is or would be prejudicial to one or more of the matters mentioned in subsections (4) and (5) of that section, they shall vary the licence in accordance with subsection (2). 
 (2) The variation— 
 (a) must be made with a view to ensuring that the relevant change of control is not prejudicial to any of the matters so mentioned; and 
 (b) must be a variation for the inclusion in the licence of such conditions relating to any of those matters as they consider appropriate. 
 (3) Subject to subsection (4), any new or varied condition imposed under this section in relation to any matter may be more onerous than the conditions relating to that matter having effect before the relevant change of control. 
 (4) A variation under this section must not provide for the inclusion of a new or varied condition in a licence unless the new condition, or the condition as varied, is one which (with any necessary modifications) would have been satisfied by the licence holder throughout the twelve months immediately before the relevant date. 
 (5) In subsection (4) ''the relevant date'' is the date of the relevant change of control or, if earlier, the date on which OFCOM exercise their powers under this section. 
 (6) A variation of a licence under this section shall be effected by the service of a notice of the variation on the licence holder. 
 (7) OFCOM are not to serve a notice of a variation under this section unless they have given the body on whom it is served a reasonable opportunity, after the publication of the report of the review under section [Changes of control of Channel 5], of making representations to them about the variation. 
 (8) Where, in a case of a proposed change of control, a notice varying a licence under this section is served before the change to which it relates takes place, the variation is not to take effect until the change takes place. 
 (9) A condition included in a licence by a variation under this section may be further varied by OFCOM either— 
 (a) with the consent of the licence holder; or 
 (b) in any other case, after complying with the requirements of section 3(4)(b) of the 1990 Act (variation after giving opportunity for representations by the licence holder). 
 (10) Expressions used in this section and section [Changes of control of Channel 5] have the same meanings in this section as in that.'.—[Dr. Howells.]
 Brought up, and read the First time. 
 Motion made, and Question put, That the clause be read a Second time:—
The Committee divided: Ayes 13, Noes 6.

Question accordingly agreed to. 
 Clause read a Second time, and added to the Bill.

New clause 17 - Irish language television programmes

'.—(1) The Secretary of State— 
 (a) may, for the financial year beginning with 1st April 2004, and 
 (b) shall, for each subsequent financial year, 
 pay to OFCOM such amount as he may, with the approval of the Treasury, determine to be appropriate for the purposes of this section. 
 (2) Any amount received by OFCOM under subsection (1) shall be carried by them to the credit of a fund established by them under this section, to be known as the Irish Language Television Fund (and any such amount shall accordingly not be regarded as forming part of the revenues of OFCOM). 
 (3) The Fund shall be under the management of a body established for the purposes of this section, which shall be called Coiste Teilifise Gaeilge (the Irish Language Television Committee). 
 (4) Coiste Teilifise Gaeilge shall consist of no more than 10 members, the members and Chairman of the Committee are to be appointed by OFCOM. 
 (5) The committee shall include members nominated by the following bodies— 
 (a) Foras na Gaeilge (Irish Language Agency, Cross-Border Language Body); 
 (b) Ultach Trust; 
 (c) TG4; 
 (d) BBC NI; 
 (e) The Northern Ireland Film and Television Commission. 
 (6) OFCOM must secure, so far as practicable, that the membership of the Committee is such that the interests of the following are adequately represented— 
 (a) the independent television production sector in Northern Ireland; 
 (b) other persons and bodies concerned with the promotion of the Irish language in Northern Ireland; 
 (c) other persons and bodies concerned with Irish-medium education and the teaching of Irish in the English-medium educational sector in Northern Ireland. 
 (7) When appointing members of the Committee, OFCOM must have regard to— 
 (a) the desirability of having members of the committee who are proficient in written and spoken Irish; 
 (b) any guidance issued by the Secretary of State for the purposes of this section. 
 (8) The Fund may be applied by the Committee— 
 (a) in the making of grants for the following purposes, namely— 
 (i) financing the making of television programmes in the Irish language primarily with a view to the broadcasting of such programmes by TG4 and/or other appropriate broadcasters for reception in Northern Ireland and elsewhere; 
 (ii) financing the training of persons employed or to be employed in connection with the making of such programmes; and 
 (iii) other purposes connected with or related to the making of such programmes; and 
 (b) in financing the undertaking of research into the types of television programmes in the Irish language that members of the Irish-speaking community in Northern Ireland would like to be broadcast. 
 (9) When making any grant out of the Fund in pursuance of subsection (8) the Committee may impose such conditions as they think fit, including conditions requiring the grant to be repaid in specified circumstances. 
 (10) The Committee shall perform their functions under this section with respect to the making of grants out of the Fund in such manner as they consider will secure that a wide range of high quality 
television programmes in the Irish language are broadcast for reception in Northern Ireland. 
 (11) Any sums required by the Secretary of State under subsection (1) shall be paid out of money provided by Parliament. 
 (12) In this section: 
 ''OFCOM'' means the Office of Communications; 
 ''the Committee'' means the body established under subsection (3) above; 
 ''TG4'' means the dedicated Irish language station broadcasting from the Republic of Ireland and cited as ''Teilifis na Gaeilge'' in the Belfast Agreement, Rights, Safeguards and Equality of Opportunity: Economic, Social and Cultural Issues, Paragraph 4.'.—[Mr. Simon Thomas.]
 Brought up, and read the First time.

Simon Thomas: I beg to move, That the clause be read a Second time.
 I am pleased that, in our 26th sitting, we have at last come to the only new clause that I have tabled, although I have of course tabled amendments. I have waited not only 26 sittings, but 20 years to do so. Some 20 years ago, I was at university, constructively employed—unlike the Government Whip, who clearly has other things to do—in studying the Irish language. At the time, I thought that I was doing that out of intellectual curiosity and to find out a little more about folk music—but I will not mention folk music again in front of the Minister because I do not want to lose his sympathy so early in this debate. Twenty years later, I have an opportunity to take more account of what has been happening in Ireland during that period. 
 Use of the Irish language has grown, and the Bill enables us to implement some important provisions of the Belfast agreement that have yet to be brought into effect. We have an opportunity to think for a few minutes about how we might improve the Bill to ensure better provision for Irish-language broadcasting in Northern Ireland. If we do that, we will make our own small contribution to the long peace process in that part of Ireland.

Mark Hoban: Will the hon. Gentleman confirm what he means by Irish language? Is he talking about Ulster-Scots Gaelic or Irish Gaelic?

Simon Thomas: I do not know how much of a lecture the hon. Gentleman wants on the history of the Irish language. [Interruption.] A two-hour lecture? Very well.
 I studied Irish for only one year, when I was at university. I studied Donegal Irish, which is the Irish of Northern Ireland. It is very close to Scots Gaelic; the two dialects are about 70 or 80 per cent. interchangeable, and the level of understanding between two speakers can be even better than that if they speak very slowly—or after several whiskeys. 
 In Wales, the dialect that was spoken in my valley has almost died out, but that has not stopped a third of parents in the valley from giving their children a Welsh-language education. That is the important thing. Those children are learning a more standard form of Welsh, not the local dialect as such, but they are participating in a bilingual Wales none the less. 
 The same thing has happened in the growth in the use of the Irish language. It has moved out from the west, where it was isolated, and into the cities, including Belfast. Use of the Irish language has taken off in Dublin—especially on some of its poorer estates—as the Select Committee on Welsh Affairs saw when it went to Dublin a year ago. Parents have taken it up as an important part of the education of their children—[Interruption.]

Roger Gale: Order. I appreciate that we are nearing the end of the Committee, but there is a lot of noise and we still have much work to do.

Simon Thomas: Thank you, Mr. Gale. The growth in the language is a part of a renaissance of awareness on the part of people from all parts of Ireland that they have a common heritage, that they can share in that heritage no matter what their political background, and that the Belfast agreement enables them to make provision for that heritage to be available to everyone in all parts of the island of Ireland. That is the important point. It does not really matter whether the Irish that is being taught is the Irish that was spoken in Belfast 200 years ago.

Richard Allan: I will assist the hon. Gentleman, as I, too, encountered these subjects during the course of my studies. A long time ago the Celtic language branched into P Celtic and Q Celtic. Scots Gaelic and Irish Gaelic are both in the Q Celtic family, and P Celtic transformed into the Welsh and British Celtic languages, so they are very similar.

Simon Thomas: I am grateful to the hon. Gentleman. I understand that he studied Celtic, so he knows a lot about these things. To avoid any confusion, it is worth saying that a Welsh and Irish speaker would not find each other mutually understandable.

Mark Hoban: I am sorry to appear to be a pedant, but in yesterday's Northern Ireland questions a query was raised about Ulster Scots Gaelic being one language and Irish Gaelic being another. Which Irish language is the hon. Gentleman going to promote with the fund he proposes?

Simon Thomas: The hon. Gentleman would have to do the three years of Celtic study that the hon. Member for Sheffield, Hallam (Mr. Allan) did, or even the one year that I did at university, to understand the range of Irish/Gaelic speaking that exists from the very southern part of Ireland to the highlands of Scotland.
 There is a range of dialects. The two dialects at the far ends of that range are not really mutually comprehensible, but as soon as one moves towards the middle of the range one finds dialects that are fairly mutually comprehensible. For example, a Scots Gaelic soap opera has been shown in Ireland, and it is comprehensible to most Irish speakers. Over the past 100 years, Irish has become standardised and because of education and standardisation, dialects that were once fairly mutually incomprehensible throughout the island of Ireland are now more widely comprehensible. If the hon. Member for Fareham (Mr. Hoban) is really interested in the subject, he should go to the Isle of Man, which is right in the middle. There he will find the two dialects coming together in Manx, which is a 
 combination of both Scots Gaelic and the Irish language. He must understand that we are talking about a range of dialects that have diverged into two languages and that they remain important in Ireland in political and cultural terms.

Michael Fabricant: I have great sympathy with what the hon. Gentleman is saying. The first Bill Committee on which I served was on the Welsh Language Bill in the 1992 to 1997 Parliament. I appreciate and follow his reasoning that if the provisions he proposes were adopted, the speaking of Irish Gaelic would be encouraged. Although this might be a chicken-and-egg question, to get the matter in context it would be helpful to know how many people—either in total or as a percentage—in Northern Ireland he estimates have Irish Gaelic as a primary or secondary tongue.

Simon Thomas: I am delighted by that intervention because it takes me back to the new clause. The answer is 167,000 people, or 10.35 per cent., of the Northern Ireland population, as published in the 2001 census, the results of which have been available for about three weeks. Those figures reveal an increase of 10 per cent. in 10 years.
 I suggest to the hon. Gentleman and other Committee members that that increase is a direct result of the further provision of education in the Irish language in Northern Ireland. Young people comprise much of that figure, and although not all of them are first-language Irish speakers, it should be emphasised that they have a significant knowledge of Irish and have been educated, at least in part, through the medium of Irish. Those statistics reflect an interesting change in the pattern of Irish speaking. As the Gaeltachtaí—the protected Irish language areas in the Republic of Ireland—have become weaker, there has been an upsurge of interest in Irish in other parts of Ireland. 
 My new clause would establish an Irish language television committee—a Coiste Teilifise Gaeilge—with members from the interested bodies in Northern Ireland. Those are as follows: Foras na Gaeilge, or the Irish Language Agency; the Ultach trust, which looks after, supports and promotes the Irish language; Teilifis na Gaeilge, the Republic's Irish language broadcaster—the S4C of the Republic; and the Northern Ireland Film and Television Commission. I should emphasise that Foras na Gaeilge, a cross-border language body, was set up under the Belfast agreement and is funded by the Republic of Ireland and the British Parliament. 
 In addition to the increase in Irish speaking in Northern Ireland, there was a good response to the consultation on the Bill. The Government consultation document, ''A New Future for Communications'', included a provision on Irish-language broadcasting in Northern Ireland. There were 300 responses to the consultation generally, but 590 postcard responses from supporters of Irish language broadcasting in Northern Ireland—outnumbering two to one the responses to the Bill overall. I suspect that there was a little campaign going on, but that is part of the 
 democratic process. It is good to see people organising to get what they want.

Andrew Robathan: Did I just hear the hon. Gentleman say that there were 590 responses in favour of Irish-language broadcasting? I doubt that he would consider that to be statistically significant, any more than the rest of the Committee would.

Simon Thomas: I strongly disagree with the hon. Gentleman. It is statistically significant, because there were only 300 other responses to the consultation. Almost 600 people were prepared to respond in respect of the Irish language, and there were only 300 other responses relating to all the things that we have spent the past 25 sittings debating. That tells us something about what people in Northern Ireland are saying about access to Irish-language broadcasting.
 The new clause fits in well with the overall structure of the Bill. We have talked previously about how the Bill enshrines cultural diversity, particularly in relation to the Gaelic Media Service and S4C. As I have said before, the Government can point to S4C and the Gaelic Media Service and say that they have done what they said they would do for cultural diversity in the United Kingdom. It is good that they can point to the enshrinement in the Bill of the ongoing standing of those broadcasters. 
 When the Secretary of State introduced the Bill to Parliament, she said: 
''communications is about much more than economics. The Bill deals with the means by which our society speaks to itself and, as it were, hears the echo. It is the means by which we talk to the world. It is a shaper of our culture, our identity and our values.''—[Official Report, 3 December 2002; Vol. 395, c. 782.]
 For a significant number of people in Northern Ireland, the Irish language is a shaper of their culture, identity and values. I accept that is not true for everyone. None the less, the Irish language is an important element of society in Northern Ireland. 
 The new clause actually refers to a treaty obligation that the Government have entered into to provide for Irish-language broadcasting in Northern Ireland. Although the new clause might be resisted on several grounds, it cannot be resisted on the grounds that the Government cannot undertake to set up an Irish-language production fund, as they have a treaty obligation with the Irish Republic to do that. The Belfast agreement includes a British Government commitment to 
''seek more effective ways to provide financial support for Irish language film and television production in Northern Ireland''
 and—although it is not covered by my new clause—to 
''provide more extensive access in Northern Ireland for TG4'',
 which is the Republic's Irish language broadcaster, Teilifis na Gaeilge. 
 That commitment was reiterated in the White Paper published in December 2000. It stated that, as the Committee has learned: 
''Irish language broadcasting in Northern Ireland is less developed than Celtic language broadcasting in Scotland and Wales.''
 It continues: 
''The Government has made several commitments in the Belfast Agreement . . . Our aim is to give effect to these commitments without adversely affecting English language broadcast provision.''
 Given that commitment in the White Paper, it was surprising to many in Northern Ireland, and to those who, like me, take an interest in Celtic-language broadcasting, that there was nothing about it in the draft Bill or the Bill we have before us. We have given a commitment to give effect to the treaty obligations of the Belfast agreement, so it is right that we take the opportunity now, the end of our consideration in Committee, to think about how we might achieve that. 
 Let me emphasise that point by quoting from Northern Ireland questions yesterday. First, the hon. Member for Grantham and Stamford (Mr. Davies), who speaks for the Conservatives on Northern Ireland, asked the Secretary of State for Northern Ireland whether he agreed that 
''any settlement in Northern Ireland and the future of the Province as a whole must be based on the full implementation of the Belfast agreement''.
 The Secretary of State's reply was: 
''Yes I do, and that is exactly what we have been discussing during talks in the past couple of weeks.''
 I then asked a question to the Under-Secretary of State for Northern Ireland, the hon. Member for Basildon (Angela Smith), about broadcasting in the Irish language, to which her reply was: 
''we are looking at all practical and effective ways in which to pursue our obligations in respect of Irish language broadcasting under the Belfast agreement. The Secretary of State has asked me to introduce further proposals for funding, including the establishment of a production fund.''—[Official Report, 5 February 2003; Vol. 399, c. 255–56.]
 That commitment to the establishment of a production fund was given yesterday, and my new clause would allow the Government to put that commitment into action immediately. I hope that we will hear some welcoming words in a few minutes. Who knows? Perhaps I will follow the roll of the hon. Member for Ryedale. 
 The important point is that all parties in the House know that we have a duty to ensure that the Belfast agreement is implemented in full. Irish language broadcasting in Northern Ireland is not a stumbling block or one of the great issues in the agreement, but every part of that agreement is a small building block in the peace process. We, as legislators in the United Kingdom Parliament, should take every opportunity that comes before us to legislate to produce such building blocks. This is an opportunity to send out a clear signal, in the context of what is happening in Northern Ireland, that we have taken the responses to the White Paper consultation and our obligation under the Belfast treaty seriously. 
 Under the framework of the Bill, either by means of my new clause or perhaps a Government new clause tabled on Report, we should introduce provision for Irish-language broadcasting in Northern Ireland. The important thing to emphasise is that my clause follows a similar line to the provisions on the Scottish Gaelic Media Service that we agreed in Committee several sittings ago. There is no great principle involved, other than if we are to treat one Celtic language in 
 Scotland—which incidentally is spoken by fewer people than Irish—in one way, there is no reason why we should not follow a similar pattern for Irish language broadcasting in Northern Ireland. 
 I do not want to establish a new authority in the same way that S4C is constructed, but an Irish-language service. I want such a provision to be in the Bill, rather than wait for the Government to announce today, tomorrow or whenever that they are to set aside £5 million for Irish language broadcasting under, say, the Northern Ireland Film and Television Commission. That would not be sustainable: the Government might make such an announcement today, but there will be other demands on that money next year and the year after. The establishment of a committee to manage such a service is important. 
 There is no doubt that the new clause could be implemented immediately. A production centre is ready to work in the Irish language in Northern Ireland. Teilifis na Gaeilge, the Irish-language television channel located in the Republic, tells me that it has a huge number of applications from independent production companies based in Northern Ireland that wish to make programmes in Irish. We could move swiftly on from the adoption of an Irish language broadcasting service. TG4 cannot commission such programmes because its remit as yet does not extend that far. 
 Some viewers in Northern Ireland can receive TG4 because there is an overspill over the border—in fact, if people want to watch Teilifis na Gaeilge they should come to Wales, to St. David's and the Lleyn peninsula, where they would get clearer reception of the Irish service than of the Welsh service from Cardiff. That is not surprising because the area is much closer to Ireland than it is to Cardiff. I often watch Irish-language television during the summer, when I go to north-west Wales on my holidays. We can easily watch Irish-language television and listen to Irish-language radio. The weather forecast is much more accurate—if we want to know the weather for north Wales, we look at the weather forecast for Ireland. We are far better off watching Irish television in that context. 
 The new clause reflects the way in which we as a Committee have decided to deal with the provisions for Welsh-language broadcasting and Gaelic in Scotland. One issue is worth mentioning, because it may be what the hon. Member for Fareham was driving at. A form of English is spoken in Ulster—Ullans—that is similar to Scots Lallans. It has a trust that looks after its promotion. A recent book—I think it was called ''The Haimley Tongue''—describes the history of the language within the agricultural communities. It is particularly associated with the Protestant tradition, but it is very much part of the cultural diversity of Northern Ireland. We must also broadcast in Ulster Scots and reflect that linguistic tradition. 
 The reason why such matters are not dealt with under the new clause and the Bill is that they are not mentioned in the Belfast agreement. It does not 
 address the needs of Ulster Scots broadcasting. That may be a flaw, or perhaps a compromise was reached. I do not know the history of the issue. I want us to stick to the agreement, not add to it. 
 We know that support for Irish-language broadcasting in Northern Ireland is both cultural and political in nature, but it is a game that we have all agreed to play. We know that provision of Irish-language broadcasting is part of the wishes of a significant number of people in Northern Ireland. They consider it to be a benefit of the Belfast agreement in the same way that they gained a cross-border body on the Irish language—Foras na Gaeilge. This is the right time to establish the Irish-language service in Northern Ireland in legislation and press the Government to make their proposals. I hope that the Minister will tell us how the Government will deliver the funding promised in the Belfast agreement and in Northern Ireland questions yesterday.

Roger Gale: Before we start the debate, I remind Committee members that, should there be a Division in the House I will suspend the Committee. No injury time is allowed under the rules that we now observe.

Richard Allan: I rise to speak briefly in support of the new clause tabled by the hon. Member for Ceredigion (Mr. Thomas). Throughout our proceedings, he has, rightly, pressed us to make space for some of the UK's minority languages within the mass media. Languages such as Irish Gaelic are a precious cultural resource in the UK that will be lost if we do not keep contact with them. The only way in which languages can survive in a mass media world is if they have a foothold—
 Sitting suspended for a Division in the House. 
 On resuming—

Richard Allan: The hon. Member for Ceredigion has hit on an important point. Our languages add tremendous value to the culture of the United Kingdom and the British Isles as a whole, yet they have been hugely undervalued. There is still an almost imperial attitude from the times of the English conquest towards them. We do not value our languages sufficiently highly, and in some ways, they are looked down upon. Given the languages' huge success, especially in Wales and to a large degree in Scotland, now is the time for us to pay more attention to our indigenous culture.
 The moves proposed in the new clause would ensure that the Irish language is equally represented in the mass media. As times move on, a mass media presence is essential. We have a great canon of literature in the Irish, Welsh and Scots Gaelic languages, but they are less accessible through television and radio. It is appropriate that we give prominence to our indigenous languages and our cultural heritage in the mass media. I hope that the Minister can respond positively to the suggestions of the hon. Member for Ceredigion.

Kim Howells: I am sure that the Committee will agree that the hon. Member for Ceredigion spoke
 exhaustively to his new clause. It was great to hear the English imperialist apostate remind us that there is a wealth of great culture and literature in other languages besides English. The past hour has been a great education for me. I am sure that the whole Committee appreciated the benefit of two expensive university educations in Celtic studies and languages. It was marvellous. I am always surprised by the riches in this great building.
 The new clause would require the Government to provide finances to Ofcom to establish an Irish language television fund. It would be managed by a new body, the Irish Language Television Committee. The committee would use the fund to make grants to finance the making of programmes in the English language and to finance training and other related purposes, including undertaking research into the type of Irish-language programmes that the Irish-speaking community in Northern Ireland would like to be broadcast. Such excellent aims are very worthy. 
 I am aware of the strength of feeling generated by Irish-language broadcasting in Northern Ireland. As the hon. Member for Ceredigion reminded us, its importance was recognised in the Government's commitments in the Belfast agreement, one of which was to find more effective ways in which to encourage and provide financial support for Irish language film and television production in Northern Ireland. That intention lies at the heart of the new clause. 
 The communications White Paper published in December 2000 highlighted that Irish-language broadcasting in Northern Ireland was less developed than Scottish Gaelic-broadcasting in Scotland or Welsh-language broadcasting in Wales. It restated commitments from the Belfast agreement and indicated that our aim is to give effect to those commitments without adversely affecting English-language broadcasting, although it did not include an undertaking to introduce new provisions in the Bill. Although we are exploring ways in which to take forward the Government's commitments, we do not believe that the Bill is the best vehicle to enhance Irish-language broadcasting in Northern Ireland. 
 The hon. Member for Ceredigion may know that much useful work has been achieved through an Irish language television and film production pilot scheme. That has cost £500,000 over two years and was funded through the Northern Ireland Department of Culture, Arts and Leisure. The scheme began in April 2001 and we are keen to build on its progress. 
 Officials from my Department have been working closely with colleagues in the Northern Ireland Office in London and Northern Ireland to consider these issues and to identify options to improve the availability of Irish-language broadcasting. They have also met their Irish counterparts. My right hon. Friend the Secretary of State for Northern Ireland has asked his colleagues for proposals on further funding and on the establishment of a production fund. He is optimistic that resources can be found in order to continue to support sustainable programme production and training in the Irish language. I am confident that there will be further progress soon. 
 I hope that my comments have reassured the hon. Member for Ceredigion that we take our commitments under the Belfast agreement seriously, as he urged us to, and that we are working actively to make progress. However, we do not believe that the Bill needs to make specific provision for Irish-language broadcasting in order to achieve that. I hope that he will withdraw the motion.

Simon Thomas: I thank the Minister for that encouraging reply. I shall ignore the cheap reference about the value of degrees. One might consider whether a Welsh language degree or an art degree is more useful to society.

Kim Howells: Will the hon. Gentleman give way?

Simon Thomas: No.

Chris Bryant: Will the hon. Gentleman give way to me?

Simon Thomas: No.
 The important aspect of what the Minister said was that the Government will continue work on establishing a production fund. Whether that is under the Northern Ireland Film and Television Commission or an independent committee, the delivery mechanism is not important. I drafted the clause to find out the Government's intentions within the framework of the Bill. Given the Minister's comments and the reply that I received in Northern Ireland questions yesterday, I take it that the process is being galvanised once again. The three pilot schemes are giving their results, which will give us a better idea of how to implement the process in Northern Ireland. 
 I urge the Minister to continue to examine the issue with his colleagues in the Northern Ireland Office in order to ensure that there can be an announcement soon on a framework that would allow Irish-language broadcasting to be delivered for the people of Northern Ireland in the manner set out in the Belfast agreement. I beg to ask leave to withdraw the motion. 
 Motion and clause, by leave, withdrawn.

New clause 25 - Investigation of BBC by the National Audit Office

'In part 2 of Schedule 4 to the National Audit Office Act 1983 (c.44), the words ''the British Broadcasting Corporation'' shall be omitted.'.—[Mr. Whittingdale.]
 Brought up, and read the First time.

John Whittingdale: I beg to move, That the clause be read a Second time.

Roger Gale: With this it will be convenient to discuss new clause 26—Comptroller's report on BBC—
'(1) It shall be the duty of the Comptroller— 
 (a) as soon as practicable after the period of twelve months beginning with the commencement of this section; and 
 (b) as soon as practicable after the end of each subsequent period as may be selected by the Comptroller for the purposes of this section 
 to fulfil the review and reporting obligations. 
 (2) The period selected by the Comptroller for the purposes of subsection (1)(b) must be a period of not more than three years 
beginning with the end of the previous period for which the Comptroller have satisfied those reviews and reporting obligations. 
 (3) The review and reporting obligations for a period are—: 
 (a) an obligation to carry out an examination into the efficiency, economy and effectiveness of the BBC's services; 
 (b) an obligation to prepare and publish a report on the matters found on the review. 
 (4) Subsection (3) shall not be construed as entitling the Comptroller to question the merits of the policy objectives of the BBC's services. 
 (5) In this section— 
 ''BBC's services'' means the television and radio broadcast services provided by the BBC; 
 ''the Comptroller'' means the Comptroller and Auditor General as identified in section 3(1)(a) of the National Audit Act 1983.'.

John Whittingdale: The purpose of new clause 26 is to give the National Audit Office the power to examine the way in which the BBC spends its money. As we reach the tail end of our consideration of the Bill, I am glad that we have returned to the subject of the BBC after our Irish adventure.
 Currently, the NAO is able to report on the BBC's arrangements for the collection of the license fee, and also to examine the BBC's use of the grant that it receives from the Foreign and Commonwealth Office for the purpose of funding the World Service. However, that represents only a small proportion of the public money that is spent by the BBC, as it excludes almost the whole of its spending on the delivery of its programme services, a sum that now totals well over £2 billion. There is considerable concern that this leads to a lack of accountability. The new clause would rectify that. 
 A number of people have examined the matter and reported their views on it. The first document that I draw to the attention of the Minister is the report of the Independent Review Panel into the future funding of the BBC. The panel was set up by the Government and it reported in July 1999. In its conclusion, the panel recognised that the BBC had accepted that it had a duty to be accountable and that a number of steps had been taken in recent years to increase its accountability. They included the annual evidence session with the Select Committee on Culture, Media and Sport, the separate annual reports for BBC Worldwide and BBC Resources, and open meetings. 
 Despite these welcome improvements, the report of the review panel said: 
''Still, in the course of our enquiry, we have found ourselves asking the question: to whom, exactly, should the modern BBC be financially accountable? We recognise the governance is not directly within our terms of reference, but we have been asked to take a forward look at the funding.''
 The panel considered the question of how it should be financially accountable. The report continues: 
''The most serious lacuna that results from the structure of the BBC concerns financial control. The BBC is disposing of a substantial sum of what is essentially public money.''
 One part of that money is already subject to parliamentary controls but another and far larger part is not. 
 The report goes on to quote from a letter sent by the then chairman of the Public Accounts Committee, my right hon. Friend the Member for Haltemprice and Howden (David Davis), who argued that the BBC's spending should be brought within the remit of the National Audit Office. He said in his letter: 
''The Comptroller and Auditor General's inability to report to Parliament on the way the BBC uses the license fee seriously weakens the accountability of the BBC.''
 The review panel concluded: 
''We agree and, accordingly, recommend that the National Audit Office should be empowered (by an amendment to the Charter) to carry out periodic financial audits of the BBC's accounts and its fair trading arrangements.''
 That is a strong conclusion that leaves one in little doubt of the view of the review panel. It is worth remembering that the chairman of the review panel was Mr. Gavyn Davies. Since he chaired the review panel, Mr. Davies has mysteriously changed jobs and, I am sure completely coincidentally, has also changed his mind. Now we are told that he no longer believes that the NAO should have this power.

Michael Fabricant: In fairness, it should be said that the right hon. Member for Islington, North (Chris Smith), when he was the Secretary of State for Culture, Media and Sport, took the view that in no circumstances should the BBC be subject to examination by any external bodies. However, now that he has changed jobs, he has also reversed his opinion, so these things do happen.

John Whittingdale: My hon. Friend makes an extremely makes a valid point. There do seem to be many changes of mind on this issue. However, we on the Opposition Benches in Committee have not changed our minds and have been entirely consistent.

John Greenway: That has been the case since 1997.

John Whittingdale: As my hon. Friend has intervened on me, I should pay tribute to him for having perceived the issue earlier. When the BBC—the chairman, the director-general and other members—gave evidence to the Culture, Media and Sport Committee last year, my hon. Friend pressed the BBC quite hard on why it felt that it should be exempt from examination by the National Audit Office. I do not think that he was wholly persuaded by the answers that he received and neither was the Chairman of the Select Committee, the right hon. Member for Manchester, Gorton (Mr. Kaufman), who said that
''the BBC is created by Parliament and it would not exist if Parliament did not create it. The BBC's independence which Sir Christopher Bland used to proclaim the whole time is its independence in terms of politicians not interfering with its programming—that is the BBC's independence. The idea that Parliament, which creates you and funds you''—
 he was, of course, addressing the BBC— 
''ought not to have the right for the NAO to investigate you I have to say . . . is a misuse of the very important ethos of BBC independence in terms of politicians not interfering in any way with what you broadcast.''
 The right hon. Gentleman's view was clear: the BBC should be examined by the NAO. 
 I turn to a report that was published by the Public Accounts Committee, which recently examined the collection of the television licence fee. That is, as I said earlier, one of the small areas of BBC activity that is subject to examination by the NAO. An exchange of correspondence between the Chairman of the PAC and the permanent secretary at DCMS is published at the back of that report. The permanent secretary replied to the Chairman, saying that she had considered the views of the Committee on extended access to the BBC by the Comptroller and Auditor General. She also confirmed that the FCO had received no representation about NAO access to the World Service in the past six years. I will return to that matter. She made it clear that Ministers would welcome any further comments that the Committee had in the context of the current consultation, and that the Department would take a view in the round about the BBC's governance and accountability. 
 In response to that invitation, the current Chairman of the PAC, my hon. Friend the Member for Gainsborough (Mr. Leigh), wrote to the permanent secretary and set out clearly the reasons why the PAC believes that is right that the BBC should be subject to examination by the NAO. In that letter, my hon. Friend dealt at some length with the objections that the BBC has raised about why it should not be examined. Those objections include the suggestion that by coming under the auspices of the NAO it would somehow become a political body and therefore more prone to interference from Ministers. That is belied by the position of the World Service. 
 It could be argued that the World Service, above all, should be seen to be wholly independent of political interference. Its reputation across the globe is built on the fact that it is perceived to be a wholly impartial, objective service that has no political allegiance either in this or any other country. It carries such credibility because of that reputation. Yet the World Service is audited by the NAO, and the permanent secretary made it clear that that has not given rise to any complaints about interference, nor to any other objections that suggest that it is being tainted by that process. Therefore, I do not think that the BBC's claim that because of its impartial position it should be outside the NAO's remit stands up to scrutiny.

Simon Thomas: The force of the hon. Gentleman's argument is compelling, although I know that the BBC has advanced a different argument. I am concerned, however, about his amendment and the road down which he wants to take the Committee. How could we be sure that the bean counters were not making artistic judgments over the BBC? The BBC has to invest in certain sorts of programme—in order to establish digital broadcasting, for example—and, as the Committee has debated at length, it provides programmes to meet certain niche interests. The BBC must retain independence over such things, but accountants might not take a good view of that, so how can we be sure that their views will not prevail under these proposals?

John Whittingdale: The NAO and the PAC have made it clear that if the NAO were to be involved in the examination of the use of public money it would
 not get involved in any way in decisions about programming policy. That would be outside its remit, and it would not claim to have any jurisdiction or relevant experience to make decisions on that.

Michael Fabricant: I have some sympathy with what the hon. Member for Ceredigion says, but before we criticise accountants we should acknowledge that one of the most innovative directors-general of the BBC was Michael Checkland: he is a chartered accountant who came up through the financial department of the BBC.
 John Birt and Greg Dyke have pointed out that there are areas in the corporation where there is waste, and they have tried to address that, but there must be other areas of waste. The NAO could expose them—and if there are not other areas of waste the NAO, which is an external body, could confirm that.

John Whittingdale: Anybody who has had any experience of working inside or dealing with the BBC would probably accept that there is—to put it mildly—scope for efficiency savings.

Andrew Lansley: Does my hon. Friend accept that we do not need to speculate about this because the role of the NAO is exemplified by the report to which he referred to? It identifies inefficiencies in licence fee collection and the number of empty houses that were being visited, for example. That is a classic example of where the NAO has a role to play that has nothing to do with programming.

John Whittingdale: My hon. Friend is right. We are dealing with £2.5 billion of public money. The idea that there should not be some kind of external scrutiny to ascertain whether that money is being spent in the most cost-effective manner is utterly ridiculous. I shall continue to draw attention to people and bodies who share our view on this. I have referred to the report of the Select Committee on Culture, Media and Sport. The conclusion states:
''We consider it a matter for regret that the Secretary of State for Culture, Media and Sport rejected the proposals that elements of the BBC's finances be subject to scrutiny by the National Audit Office.''
 There is also an official report entitled ''Holding to account: the review of audit and accountability for central Government'' by Lord Sharman of Redlynch, who comes from KPMG. The conclusion stated that the Comptroller and Auditor General should be given access to the BBC, as was originally recommended by the Davies review on the future funding of the corporation. 
 Most recently—two weeks ago—the House debated the recent reports of the PAC.

Andrew Lansley: That was last Wednesday.

John Whittingdale: My hon. Friend corrects me. That debate took place last week. During the course of it, a number of hon. Members referred to this matter, but I wish to highlight the contribution of the Chairman of the Public Accounts Commission, the right hon. Member for Swansea, West (Mr. Williams), who is a distinguished Labour Member. He said:
''We have produced about 70 reports, but we have been impeded in some ways by the existence of no-go areas . . . The BBC is one of the most outrageous examples.''
 The right hon. Gentleman went on to describe his exchange with the director-general: 
''In the more than 12 years that I have been on the Committee, I have never been aware of any complaint from the BBC that our monitoring of the overseas service had in any way impinged on its editorial freedom. I thought that we should confirm that, however, so I asked the permanent secretary if she would check with her Department whether there had been any complaints''.
 As I have said, the Department came back and confirmed that there had been complaints. The right hon. Gentleman then explained what happened when he raised the matter with the director-general: 
''It got worse, however. Mr. Dyke displayed a sheer arrogance, verging on contempt for the Committee, which was revealed in his answers to questions. I pursued the issue with him and, in answer to question 223, he said:
'There were quite strong arguments against when we were established in 1982 and those positions have not changed.'' '
 The right hon. Member for Swansea, West followed that up and said: 
''You know what they are, do you, the strong arguments that were against in 1982''.
 Mr. Dyke responded: 
''I have looked at what the arguments were because I guessed the question might come up.''
 The right hon. Member for Swansea, West said: 
''In that case, you should be well prepared.''
 Mr. Dyke replied: 
''Being prepared and deciding to enter the debate are two different things.''
 The right hon. Member for Swansea, West concluded: 
''Therefore, according to Mr. Dyke, he had taken the trouble to prepare to answer a question that he was not prepared to answer when he came to the Committee.''—[Official Report, 29 January 2003; Vol. 398, c. 916–17.]
 That smacks of extraordinary arrogance. In our debates, we have returned on several occasions to the accountability of the BBC. 
 My hon. Friends and I strongly believe that it is extraordinary that Ofcom does not come within the scope of the biggest broadcaster. However, I shall not re-open such a debate now. My request is much more limited than that. It is of genuine concern that an organisation that has control of a huge sum of public money but is not spending it in the most efficient manner possible should be subject to an external audit. That was the view of the current chairman of the BBC, before he became chairman. It is the view of the Public Accounts Committee and the Culture, Media and Sport Committee. It was the view of Lord Sharman when he looked into the matter and several senior members of the Labour party, such as the right hon. Members for Manchester, Gorton and for Swansea, West. 
 Given that the permanent secretary said in her letter to the Committee that Ministers were re-examining the issue and would reach a conclusion after they had examined matters in the round, I hope that the Minister will now put an end to such a long-running 
 saga and confirm that the BBC, like all other public bodies that have use of public money, should come under the examination of the National Audit Office.

Chris Bryant: I have long supported the contention that the BBC should be subject to the National Audit Office. Indeed, if the hon. Member for Maldon and East Chelmsford had undertaken more research, he would have found that I had said that in the Select Committee hearings to which he referred. It would have been nice to be cited by him as a senior hon. Member, but clearly I am not.
 It is quintessential in a democracy that public money should be fully and transparently accounted for. Incidentally, I held that view when I worked at the BBC and wrote speeches for the chairman and the director-general, arguing that it should not fall subject to the National Audit Office. I am fully acquainted with the arguments. 
 Now that I have changed my job, I can be more explicit about my belief. The inconsistencies to which the hon. Gentleman has in some degree laid bare are abundant. First and foremost, the National Audit Office can look at licence and collection. Grant in aid from the Foreign and Commonwealth Office to the World Service could be analysed, although it is bizarre that it has not been. The inadequacy of financial information that the BBC provides in its annual report is shocking. Its argument to Parliament and the public is that because its governors are accountable to Parliament and provide financial information each year, that is sufficient. 
 However, last year, on the day of the annual report's publication, the BBC governors refused to accept questions from the public or the media. They were evasive. The next day, when they appeared before the Select Committee, I asked about the BBC's long-term commitment, which was that no more than 10 per cent. of the licence fee would be spent on new services. Given that, according to the BBC's own figures, 15 per cent. was being spent this year, the BBC was asked when it had received permission from the Secretary of State to change the rule. The BBC just flustered and floundered in the way that my right hon. Friend the Member for Swansea, West described. When I was at the BBC, whenever there was a threat that somebody might start looking at the books, it was a bit like Saddam Hussein trying to hide things from the weapons inspectors; things would move from one office to another and an exciting time was had by all. 
 I am sure that the BBC will say that it has a special audit committee of the governors and that the fair trading committee is one of the most rigorous of the governors' committees. It examines every single penny and ensures that there is no unfair trading or abuse of state aid provisions. That is a load of poppycock; it is sheer and utter nonsense. Clearly, the BBC should be subject to the National Audit Office. 
 As for the bean counters, the Under-Secretary of State for Scotland, my hon. Friend the Member for Stirling (Mrs. McGuire), is married to a chartered accountant, so she will stand up for them on every 
 occasion. But in the many organisations over which it has authority, the role of the National Audit Office is not simply to analyse the money. It makes subtle and important distinctions about whether money is being used for the purposes specified by the organisation itself. That is right and proper. There is no reason why anyone should fear that the National Audit Office will say to the controller of BBC1, ''You can't put this on television at 7 o'clock on a Wednesday evening.'' 
 As the hon. Member for Maldon and East Chelmsford said, it is right and proper that broadcasters are at arm's length from the Government. It would be wrong for politicians to start telling broadcasters what to say, although I remember that Tony Benn—with whom I regularly disagree—said that broadcasting is far too important to leave to the broadcasters. The World Service receives its money directly from Government Ministers every year and there has never been an accusation of improper interference in its programming, independence or impartiality. The argument advanced by the hon. Member for Ceredigion was rather over-put. 
 Having said that, I do not think that this is the right time to change the organisation. We should look at the BBC in the round. There are many issues of financial accountability relating to the BBC that will have to be examined and, in advance of the review of the BBC next year, the Culture, Media and Sport Committee should consider that issue, among others. I hope that that will inform the debate that we will eventually have about the whole nature of the BBC. I have said before that I believe that the governance of the BBC should be far more independent from its management. Similarly, I hope that the change that we discussed will come about in the next two to three years, but it would be wrong to include it in this Bill, divorced from the other issues that need to be looked at in the round.

Eric Joyce: I will make only a few brief comments. Personnel associated with the BBC have a habit of reversing their position when they change their appointment. However, I agree with much of what my hon. Friend the Member for Rhondda (Mr. Bryant) said. Notwithstanding the Minister's excellent repudiation of the concept that the BBC should be vetted by the National Audit Office, something has struck me time and again over the years.
 The BBC runs stories about public salaries—how much people in the public sector are paid from the public purse—and we know how much the director-general of the BBC earns, but we do not know how much performers, journalists and hugely well-paid people in the BBC receive. No doubt they are paid in imaginative ways that limit their tax liabilities; I would not know on what terms people are engaged by the BBC. It may even be that some people who work for, or who receive pay from the BBC as a substantial element of their income, are possibly paid more than anyone else paid by the public purse, but there is no transparency. The NAO, which we trust to audit all parts of the public sector, would be eminently suitable to oversee this matter as well. I look forward to 
 hearing the Minister's no doubt excellent response on why the NAO should not monitor the BBC accounts.

Kim Howells: I do not know why, but my thoughts on this subject are over-shadowed by images of my ministerial car.
 As someone who served two-and-a-half years on the Public Accounts Committee—a job that I enjoyed very much mainly because there are no rules of engagement on the PAC—I feel a sense of veteranism coming on. I understand very well the strength of feeling on both sides of the House on this subject. The NAO, which reports to the PAC, depends heavily—it is perhaps over-reliant—on accountants. Because the hon. Member for Ceredigion took the hump over my remarks last time, I want to make it clear to the Committee that I would rather people were taking degrees in Celtic studies and languages than in accountancy. There are too many accountants around. Of course, some accountants are exceptions to the rule. 
 I recognise that some hon. Members feel strongly that there is a need to extend the NAO access to the BBC so as to ensure that that the corporation provide value for money in its use of licence fee revenue. Successive Governments have been reluctant to grant the NAO access to the BBC because of concerns—which we have heard about in this fascinating debate—that this could compromise the corporation's editorial independence and inhibit its creativity. Instead, other means have been adopted to ensure financial accountability, and the BBC is subject to a range of external reviews, as well as to an independent audit. 
 I was glad that the hon. Member for Maldon and East Chelmsford saw fit to quote my right hon. Friend the Member for Swansea, West, because there is no one else in the House to whom I would look for more wisdom on the subject of public accountability. I hear what the hon. Gentleman says, but I will try to explain why it is not appropriate in this case.

Mark Hoban: May I take the Minister back to his comment about the external audit of the BBC? I speak as a bean counter myself—I am a chartered accountant—and that external audit used to be conducted by the firm for which I used to work. For a long time I was mystified as to why there were calls for the NAO to look at the BBC. Clearly, there is a big difference between the role of the external auditor and that of the NAO. Simply saying that the external audit is in place does not give the accountability that taxpayers require from the BBC.

Kim Howells: I very much agree with the hon. Gentleman. I think it was Parnell, Kerr and Foster—

Mark Hoban: No, it was Coopers and Lybrand.

Kim Howells: That is right; the name was changed because there was a slight problem.

Mark Hoban: I am sorry to cut short the Minister's reference to a ''slight problem''. I think that it related to Robert Maxwell, a former Labour MP.

Kim Howells: I may have done two-and-a-half years in the PAC, but I also spent three-and-a-half years
 investigating that gentleman when I was a Minister in the Department of Trade and Industry. I remember that, and I remember the accountants who should have done their job properly. However, I do not intend to labour that point, as I want to make a bit of progress, or we shall be here until next month.
 On 18 December 2002, the Public Accounts Committee published its report, ''Collecting the Television Licence Fee''. The report includes a recommendation that the Comptroller and Auditor General should be given the power to examine how the BBC spends revenue from the licence fee. We are considering the report's recommendations and we shall respond formally in the near future. It would not be right to pre-empt the outcome of those considerations, but I assure the Committee that we are examining the issue. 
 New clauses 25 and 26 would give the Comptroller and Auditor General the power to examine the economy, efficiency and effectiveness with which the BBC manages its resources, although each new clause would do that differently. New clause 25 would remove the reference to the BBC from part 2 of schedule 4 to the National Audit Act 1983. That reference excludes the corporation from the CAG's powers to carry out value for money reviews under section 7 of the 1983 Act. New clause 26, by contrast, would impose a specific duty on the CAG to carry out periodic reviews of the efficiency, economy and effectiveness of the BBC's television and radio services. 
 The provisions of section 6(3)(d) of the National Audit Act 1983 permit the National Audit Office to carry out value for money reviews of the BBC subject to agreement between the corporation and a Minister of the Crown. The extent of NAO access proposed by hon. Members who support the new clauses and by the Public Accounts Committee's report could be achieved without changing existing legislation.

Michael Fabricant: Just as the Prime Minister has, rightly, spoken about the dangers of veto, will the Minister clarify what would happen if the BBC decided to veto a review? Could the BBC be audited if no agreement were reached?

Kim Howells: I am not sure whether the hon. Gentleman is asking for clarification or making a good point. I cannot give him clarification because I do not know the answer to the question. However, I have no reason to doubt that there is an existing facility for the NAO to examine the BBC. He will have plenty of time to check that out between now and Report, and I shall try to do the same.

Michael Fabricant: Will the Minister write to me?

Kim Howells: I might do, but I am very busy.
 There is—unintentionally, I suspect—an omission from the scope of new clause 26. The BBC's services are defined as the television and radio services provided by the BBC. The new clause would therefore prevent the NAO from considering any BBC expenditure on television and radio services provided commercially, because in practice they are provided not by the corporation directly but by 
 commercial subsidiaries. Perhaps more significantly, the NAO would not be able to consider BBC expenditure on online services funded by licence fee revenue. Given the extent of public interest in the BBC's online services and the use of licence fee revenue to fund them, I would be surprised if Conservative Members intend that such services be exempt from NAO scrutiny. I hope that the hon. Member for Maldon and East Chelmsford will withdraw the motion.

John Whittingdale: After listening to the Minister's response and the contributions of the hon. Members for Rhondda and for Falkirk, West (Mr. Joyce), I have a suspicion that although the time might not have come this afternoon for the idea proposed in the new clauses, it is not far off. I am encouraged by that and I welcome the fact that we might be able to return to the matter on Report. I know that many hon. Members of all parties would want to contribute to the debate. I shall not press the new clause today, but we shall want to examine the issue again in the near future. I beg to ask leave to withdraw the motion.
 Motion and clause, by leave, withdrawn.

New clause 30 - Public Services Fund

'(1) The Secretary of State shall by order make provision for the establishment of a Fund to be known as the Public Services Broadcasting Fund. 
 (2) There shall be at least three trustees of the Fund and the order shall make provision for the terms of their appointment, including their remuneration. 
 (3) The primary function of the Trustees shall be the making of financial contributions to groups or organisations which make or propose to make programmes of local, regional or sectional interest for inclusion in a programme service. 
 (4) The Trustees shall have such other powers as may be conferred on them by the order. 
 (5) The BBC shall pay to the Trustees of the Fund in January of each calendar year in accordance with the provisions of the order made under subsection (1) an amount equal to 1 per cent. of the licence fee received by the BBC in the preceding calendar year. 
 (6) An order under this section shall not be made unless a draft of the order has been laid before Parliament and approved by a resolution of each House.'.—[Mr. Greenway.]
 Brought up, and read the First time.

John Greenway: I beg to move, That the clause be read a Second time.
 I shall give my hon. Friend the Member for Maldon and East Chelmsford a brief opportunity to catch his breath. This morning, I pressed the point that there are many good causes in broadcasting that would value some financial support. The Minister graciously acknowledged that they were indeed good causes and, in fact, added one or two to my list. On that occasion, I suggested that the potentially substantial resources that come into Ofcom's hands from penalties or licence payments for sale of spectrum might be placed into a fund that could be used for various good causes. The Minister did not respond to my point about licence payments. 
 The new clause represents a slightly different approach, suggesting that an element of the licence fee might be used to make provision for, for example, research, innovative programme making, community radio, and the development of new technology for those who are hard of hearing, partially sighted or blind. The idea behind new clause 30 is rather like that in new clause 25—if its time has not yet come, it cannot be far off. Parliament has to face the fact that there is a growing discrepancy between the haves and the have-nots in the broadcasting environment. In an earlier debate, I made the point that the trend of the past few years, partly because of the licence fee increase— 
 Sitting suspended for a Division in the House. 
 On resuming—

John Greenway: Time is of the essence, so I shall draw my remarks to a close. There is a problem of rich and poor in broadcasting. The BBC, with its £2.5 billion in licence fees, is in the rich category, but many organisations seeking to innovate in broadcasting could do with some help. A small contribution from the licence fee would not go amiss. I commend to the Minister the idea that if just 1 per cent. of the licence fee were taken by way of a levy and placed into a public services fund of the sort that we suggest, it would provide a fund of £25 million. It has been obvious from our debates that a great deal of good could be done with that money, and the sum would be a relatively small loss to the BBC, given its overall financial structure.
 As this is likely to be the last time that I speak in this Committee, may I say what a great pleasure it has been to work under your chairmanship, Mr. Gale, and that of your co-Chairman, Mr. Atkinson. This has been an harmonious Committee, and I hope that, in that spirit, the Minister might have something positive to say about new clause 30, too.

John Whittingdale: We do not have time to go into the considerable merits of the new clause, although I would have liked to spend a while setting them out. However, perhaps we will have another opportunity to do so.
 With your permission, Mr. Gale, I should like to add to what my hon. Friend the Member for Ryedale has said, and express the Opposition's thanks to you and Mr. Atkinson, as well as Mr. O'Brien, who valiantly chaired one or two sittings when neither you nor Mr. Atkinson could be here. I should also like to thank the Hansard reporters, who have had a quite difficult job at times, the messengers, and all others involved.

Michael Fabricant: Does my hon. Friend agree that we should not leave out the Clerk, who was previously Clerk of the Select Committee on Culture, Media and Sport? He has shown considerable restraint in keeping quiet and in keeping the Chairman in order.

John Whittingdale: I am not sure that the Clerk with agree with that interpretation, but I was indeed about to mention him.

Roger Gale: Order. The Clerk has advised me that the hon. Member for Lichfield (Michael Fabricant) is out of order.

John Whittingdale: The Clerk knows on which side his bread is buttered. Our thanks go to him, and to all those who have sat through our proceedings. I hope that they found them stimulating.

Andrew Robathan: And the civil servants.

John Whittingdale: Yes, and the Minister's officials. We Committee members have had our arguments, but several people who have read the report of our proceedings have mentioned how good-humoured the Committee has been, and I think that they are right; certainly, I have found it to be an enjoyable experience. I would like to thank both Ministers for the way in which they have responded to our suggestions and even accepted one or two tiny ones.

Kim Howells: I am afraid that the proposal embodied in the new clause would not self-evidently represent good value for money for licence fee payers. It would involve creating a whole new bureaucracy for the power to spend money. The hon. Member for Ryedale has calculated that his proposals would make approximately £25 million available, but there would be no obvious means of accountability, especially as the National Audit Office could not get in there.
 Next year, we will begin the charter review, and the Government are content for the issues that we touched on today to be examined more fully then. At this stage, however, we do not think that the amendment could be justified within the framework of the BBC's role and constitution, or that it would add anything useful to the arrangements set out in the Bill. I hope that the hon. Gentleman will see fit to withdraw the motion. 
 While I am on my feet, may I, on behalf of my hon. Friends, especially the Minister for E-Commerce and Competitiveness, thank all hon. Members for making our time in Committee such a constructive and enjoyable long-running process. With your able chairmanship, Mr. Gale, and that of your colleagues Mr. Atkinson and Mr. O'Brien, who chaired one sitting, we have worked hard. It has been a pleasure to do so. 
 Who would have thought after seeing the 144 recommendations of the Joint Committee that it would be possible to make such a good Bill even better? However, that is what we have done. That is in no small measure down to the hard work of the Committee as a whole, to which we pay tribute. We sat for some 65 hours in 26 sittings. Of the 693 amendments, 46 new clauses and one new schedule that were tabled, I understand—the hon. Member for 
 Blaby will correct me if I am wrong—that more than 130 amendments and four new clauses were tabled by the Government. I will not give a precise figure, in case he has laid another bet. 
 We thank the Opposition for their positive and constructive approach to the Bill. We are grateful for their support for most of the provisions, and we are pleased to see that the majority of the Bill has met with cross-party support. We also recognise their efforts to make improvements. We have appreciated them, and I think that the Bill is much the better for them. I trust that they feel that their hard work has been worth while. 
 Finally, Mr. Gale, we join you in thanking the Clerk, our long-suffering Hansard reporters, the Doorkeepers and the police officers for all their work and support during the proceedings. The other human beings in the Room have had to suffer their way through our proceedings, too, and I pay homage to them. I invite all hon. Members, as well as the Clerk, Hansard reporters, the Doorkeepers and police officers who have seen duty in Committee to join us for refreshments in the appropriately licensed Inter-Parliamentary Union Room on Tuesday 11 February, from 6 pm to 8 pm, to celebrate the end of our proceedings. 
 Mr. Gale, I have enjoyed myself very much. I thank you so much for your chairmanship. I am sure that I echo the sentiments of all members of the Committee in saying that we have got a great deal of value out of the Bill.

Nick Harvey: May I thank you, Mr. Gale, your fellow Chairmen, the Clerk, and all who have been involved in what has been a very constructive process. I look forward to taking up the Minister on his hospitality next week.

John Greenway: In the face of such glowing tributes from the Minister, I beg leave to withdraw the motion.
 Motion and clause, by leave, withdrawn.

Roger Gale: On behalf of all the Chairmen, I add my thanks to those that have already been expressed to the Officers of the House, the police, the Hansard writers, the Clerk and all those who make our work—which is not always easy—bearable and possible. I also thank all hon. Members for the courtesy and good humour with which they have conducted themselves throughout our proceedings. It has been a pleasure chairing this Committee.
 Bill, as amended, to be reported. 
 Committee rose at one minute to Five o'clock.